P.K. VENKATASWARAN v. FERTILISERS AND CHEMICALS TRAVANCORE LTD.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN FRIDAY, THE 26TH DAY OF FEBRUARY 2016/7TH PHALGUNA, 1937 WP(C).No. 31501 of 2005 (A) ---------------------------- PETITIONER: -------------------------- P.K.VENKATASWARAN, B.NO.6086, ASST. SALES MANAGER (RETD) F.A.C.T., UDUMALPET NOW RESIDING AT 319/1. SRINIVAS PERIANNAN NAGAR EXTN., THADAGAM ROAD COIMBATORE-641 025. BY ADV. SRI.S.EASWARAN RESPONDENTS: ---------------------------- 1. THE CHAIRMAN & MANAGING DIRECTOR, THE FERTILISERS AND CHEMICALS TRAVANCORE LTD. UDYOGAMANDAL, ELOOR, ERNAKULAM DISTRICT. 2. THE GENERAL MANAGER (MARKETING), - THE FERTILISERS AND CHEMICALS TRAVANCORE LTD., ELOOR UDYOGAMANDAL, ERNAKULAM DISTRICT. 3. SHRI.A.SREEKUMAR, CHIEF MANAGER - (PERSONNEL) ENQUIRY OFFICER, F.A.C.T., ELOOR UDYOGAMANDAL, ERNAKULAM DISTRICT. R, BY ADV. SRI.E.K.NANDAKUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC NO.31501/2005 APPENDIX PETITIONERS EXHIBITS: EXT.P1: TRUE COPY OF MEMO OF CHARGE ISSUED UNDER MEMORANDUM NO. GM (M) MK. 29-065 ISSUED BY THE 2ND RESPONDENT DATED 24.02.2004 EXT.P2: COPY OF PROCEEDINGS NO. GM(M) - MK-29-426 DT 27TH DECEMBER 2004 ALONG with COPY OF THE ENQUIRY REPORT DT 20.12.2004 ISSUED BY THE 2ND RESPONDENT EXT.P3: COPY OF EXPLANATION DT 31.3.2005 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT EXT.P4: COPY OF ORDER NO.CGM(M)-MK-29-168 DT APRIL7, 2005 ISSUED BY THE 2ND RESPONDENT EXT.P5: COPY OF MEMORANDUM OF APPEAL PREFERRED B Y THE PETITIONER AND SUBMITTED BEFORE THE 1ST RESPONDENT ON 29.4.2005 EXT.P6: COPY OF JUDGMENT DT 5.9.2005 IN W.P(C) NO. 26150 OF 2005 EXT.P7: COPY OF ORDER NO. CM(PER)-EST-1168 DT 16.9.2005 RESPONDENTS EXHIBITS: NIL TRUE COPY P.A TO JUDGE jma *CR* ## K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) No. 31501 of 2005 - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 26[th] day of February, 2016 ## J U D G M E N T The petitioner is aggrieved with the dismissal order passed at Ext.P4 as confirmed in the appellate order at Ext.P7. The petitioner an Assistant Sales Manager was proceeded against on imputations as are seen at Ext.P1 charge sheet. Briefly put, the allegations related to the release of stock to one of the customers without proper authorisation and without collecting the payments, especially when there were outstanding dues from that particular customer. There was also one another charge with respect to dishonour of five cheques having not been informed to the Regional office for further action. The petitioner was proceeded against under the FACT Employees (Conduct Discipline and Appeal) Rules, 1977. 2. The Departmental enquiry was conducted and WPC.No.31501/2005 : 2 : Ext.P2 enquiry report was submitted by the Enquiry Officer. The petitioner was offered every opportunity to defend himself, before the Enquiry Officer. There is no violation of principles of natural justice alleged by the petitioner also. The enquiry report found him guilty of the charges. The disciplinary authority issued show cause notice along with the enquiry report and the petitioner submitted detailed objection seen at Ext.P3. The disciplinary authority having considered the issue, passed Ext.P4 order finding the petitioner guilty of the offences, accepting the findings in the enquiry report. The disciplinary authority also considered the fact that the petitioner had been found guilty in two earlier instances, in disciplinary proceedings. The petitioner was issued a censure in March 1986 and a further punishment of reversion to lower grade in July 1986. The petitioner was awarded with major penalty of dismissal, but, however, considering the fact that the he had superannuated on 31.08.2004, the dismissal was related to that day. WPC.No.31501/2005 : 3 : The gratuity due to the petitioner was also forfeited for reason of the loss caused. 3. An appeal was filed which was rejected by Ext.P7. The first contention raised by the petitioner is that the appellate authority did not give any hearing to the petitioner and the order itself is not of the appellate authority but is a communication of the decision taken by the appellate authority, through a Junior Officer. When an appeal is filed by the delinquent employee especially as a consequence of the dismissal from service, it is only proper that the appellate authority afford an opportunity for hearing to the delinquent and consider the issue in its entirety rather than communicating the decision through a junior officer. The order passed should also be a speaking one; showing the reasons which weighed with the appellate authority. Ext.P7 hence is found to be illegal and unsustainable and the same is set aside. 4. The other contention raised, is with respect to the WPC.No.31501/2005 : 4 : forfeiture of DCRG by Ext.P4 which was without notice. Originally Section 4(6)(b) of the Payment of Gratuity Act, 1972 provided for forfeiture of the whole amount in the circumstances as noticed in (i) and (ii). The words “shall be wholly forfeited” was substituted by the words “may be wholly or partially forfeited”. This necessarily conferred a discretion on the authority; which brings within its wake, the mecessotu pf a hearing before such discretion is exercised, either in favour or against the employee. Apposite would be reference to paragraph 14 of the decision of a Division Bench of Karnataka reported in 1986 LAB I.C 1976 (M/s. Bharat Gold Mines Ltd., v. Regional L.C (Central) Bangalore). “14. Before concluding, it is necessary to observe that though complying with rules of natural justice was unnecessary, for forfeiting Gratuity under S.4(6)(b) of the Act as it stood. When the decision was taken by the appellant as it provided that the gratuity shall stand wholly forfeited under circumstances specified in cls. (i) and (ii), the position has WPC.No.31501/2005 : 5 : since changed in view of the amendment of S.4(6)(b)(ii) of the Act with effect from 1.7.1984. After the amendment, it reads thus; “4(6) Notwithstanding anything contained in sub-sec (1)- xxx xxx xxx - (b) the gratuity payable to an employee may be wholly or ## partially forfeited (i) if the services of such employee have been terminated for his riotous or disorderly conduct or any other act of violence on his part, or (ii) if the services of such employee have been terminated for any act which constitutes an offence involving moral turpitude provided that such offence is committed by him in the course of his employment ## (underlined by us) The change brought about is underlined. In view of this significant change it appears to us that an employer has to take an independent decision after the termination of WPC.No.31501/2005 : 6 : service of an employee as to whether the Gratuity payable should at all be forfeited in cases which fall under sub.cl. (i) or (ii), and if so, to what extent. The decision must necessarily depend on the facts and circumstances of the case such as, the length and past record of service, extent and magnitude of the offence and other relevant considerations. Therefore, it follows that the decision has to be taken after giving notice of the proposal to the employee concerned and after due consideration of the reply furnished, if any.” I am in respectful agreement with the aforesaid declaration of law and by the amendment, the statute postulates a hearing before the discretion is exercised. 5. In the circumstance of no notice have been issued. It is only proper that the order forfeiting the gratuity be set aside without any observation on merits on the ground only of forfeiture having been effected without notice. I do so. The disciplinary WPC.No.31501/2005 : 7 : authority shall issue appropriate notice against the petitioner within a period of one month from the date of receipt of a certified copy of this judgment and hear the petitioner before an order is passed and orders shall be passed within two months from the date of hearing. The order passed shall also be subject to the order in appeal against the order of punishment imposed on the delinquent. 6. As for the appeal, the same shall be considered on the question of the sustainability of the findings in enquiry and the orders of the disciplinary authority. The petitioner shall also be afforded an opportunity of hearing by the appellate authority. Writ petition is disposed of making it clear that there is no observation on merits and the enquiry if otherwise found to be sustainable, the objections raised by the petitioner against the findings would be considered by the appellate authority as also the issue of the punishment i.e, if the same is proportionate to the WPC.No.31501/2005 : 8 : gravity of the offence. The writ petition is partly allowed with the above observations only to facilitate a re-consideration on the specific aspects noticed. No costs. Sd/- (K. VINOD CHANDRAN, JUDGE) jma //true copy// P.A to Judge